Brand E-commerce Service Market Maintains Fast Growth

Source:iResearch July 31,20178:01 PM
At the initial stage of brand e-commerce service industry, the market barrier was relatively low, thus a large long-tail market emerged with services of uneven quality, many medium- and low-end service providers while few high-end service providers. E-commerce's development and maturity laid solid basis for the development of service providers, while after a fast developing period, Chine e-commerce entered a stable period with lower growth rate, and brand e-commerce service market is expected to have the high GMV but see lower growth rate as well in the future. In 2016, the GMV of China’s brand e-commerce service reached 69.03 billion Yuan with a growth rate as high as 59.0%.
iResearch holds the opinion that since 2015, China’s brand e-commerce service industry entered a transforming stage. Some large service providers with abundant funds and strong supply chain sprang up, which raised the industry barrier and led to the high concentration on top companies and large long-tail market. In the future, the advantages of top companies will be more significant and the concentration rate of the industry will be higher, as services providers that have unsatisfying performance in management and operation are likely to be merged or knocked out later.
 
Brand e-commerce service started from Taobao & Tmall, and Tmall took the lead in mainstream B2C online shopping industry recently, therefore, Tmall became the biggest platform in brand e-commerce service field. On Tmall, brand e-commerce services are mainly provided to the flagshops, some exclusive stores and a small number of specialty shops. Other B2C e-commerce platforms like JD, Vipshop and Suning also have a small number of service providers. Apart from B2C e-commerce platforms, online stores on the brands’ official websites are also important businesses for service providers and some service providers even began to establish platforms on their own and offer special products so as to improve their awareness, shake themselves out of the reliance of well-known e-commerce platforms and take control of the product sources.

iResearch holds the opinion that the development of other B2C platforms allow service providers more choices. In the future, the growth rate of brand e-commerce service providers on Tmall will decelerate while keeping the largest number in this industry, and other platforms like JD and Vipshop will seize the chance to occupy larger market. This contributed much to the diversified development of service providers.

The latest data from iResearch showed that the GMV of cosmetics on Tmall.com reached 73.12 billion Yuan in 2016 with a YoY growth of 53.9%. Meanwhile, data from the report published by CBN Data and Tmall indicated that Tmall was the largest online cosmetics sales platform in online cosmetics B2C market in 2016 with a market share as high as 69.8%. iResearch holds the opinion that Tmall still have great potential for development in the cosmetics in the future, and its cosmetics GMV is expected to exceed 100 billion Yuan in 2017.

Cosmetics, as one of the three main battle fields for brand e-commerce service providers, are forecasted to have huge potential for revenue growth. The operation (thirdpartnar) service GMV of traditional cosmetics brands on tmall.com reached 13.23 billion Yuan, and the operation (thirdpartnar) service GMV of traditional cosmetics flagshops on tmall.com attained 9.66 billion Yuan. Meanwhile, the compound growth rate is expected to be as high as 45.4% from 2016 to 2019.

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